On September $1,2023,$ Pharoah Ltd$.$ purchased equipment for $$39,000$ by signing a two$-$year note payable with a face value of $$39,000$ due on September $1,2025.$ The going rate of interest for this level of risk was $6\%.$ The company has a December $31$ year end.

Instructions

Calculate the cost of the equipment, where necessary using any of the three methods $($tables$,$ financial calculator, or Excel$),$ assuming the note is as follows:

an $7\%$ interest$-$bearing note, with interest due each September $1$

a $2\%$ interest$-$bearing note, with interest due each September $1$

a non$$interest$-$bearing note

Record all journal entries from September $1,2023,$ to September $1,2025,$ for a $6\%$ interst$-$bearing note, with interest due each September $1.$